Points are most commonly seen with mortgages
or loans on property. As a rule, the buyer is required to
“pay points” that equals one percent of the purchase
price. It’s important to keep this in mind as you negotiate
a refinance, new loan or consolidation loan that’s based
on using your home or real property as collateral.
Some lenders today advertise that there are no points charged
for a particular type of loan. Weigh the cost of points carefully
against the interest rates and terms of a loan that doesn’t
charge points. In some cases, paying the points is actually
the lesser long-term expense.
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